This is a blog by a former CEO of a large Boston hospital to share thoughts about hospitals, medicine, and health care issues.

Sunday, February 26, 2012

Trying to tilt the playing field

As my regular readers know, I oppose protectionist policies against new health care providers who might fill a market niche left unfilled or poorly served by incumbent providers. But, at the other end of the spectrum, let's not give special treatment to those who seek to cherry-pick the system. One such attempt to do so is currently before the New Hampshire Legislature.

A bill sponsored by Cancer Treatment Centers of America® (CTCA) -- a privately held network of cancer treatment hospitals and outpatient oncology clinics -- is designed to exempt the kind of facilities owned by this company from a number of the regulatory requirements in NH that are mandatory for hospitals. (HB 1642, entitled, "Relative to Destination Specialty Hospitals.")

First, the bill would exempt these facilities from the certificate-of-need process that hospitals need to pass through. That process is designed to evaluate whether a new hospital, hospital addition, or major piece of clinical equipment serves a public need versus adding to over-capacity and higher costs. That a cancer center should be exempt is inconsistent with that public process and its purpose.

Second, the bill would exempt these facilities from paying the state's Medicaid enhancement tax. In a version of the proverbial patricidal/matricidal criminal asking for the judge's mercy because he is an orphan, the company asks for this exemption because it will refuse to treat Medicaid patients.

Other hospitals in New Hampshire are required to treat Medicaid patients and must pay this tax. Allowing CTCA to be exempt gives it an inequitable competitive advantage over established institutions who treat all comers.

If CTCA and like companies do, in fact, offer clinical services that provide distinct value to consumers as compared to established hospitals, they should be willing to do so in a face-to-face, level-playing field, environment. This bill tilts the playing field in ways that will harm the state. (You can read more about the controversy here.)

3 comments:

Anonymous
said...

This controversy appears to me to be a poster child for the kind of dilemmas which will ensue when Christensen's 'disruptive innovation' in medicine continues to outstrip regulations designed for the incumbent system. It truly is a dilemma, because if one accepts Christensen's assertion that the general hospital model is unsustainable, then 'value-added', highly efficient and high quality deliverers of specialty care should be encouraged - but not at the expense of quality oversight, nor by encouraging anti-competitive practices. Thoughtfully designed new regulations appear necessary.

But the thing that bothers me about this story in particular is that the NH House speaker seems to want the CTCA for the wrong reasons - they will be a tax revenue source - and that CTCA's CEO has no interest in providing care to everyone:

" CEO John McNeil conceded that the facility does cater to patients with greater means."It's not that we don't want to treat Medicaid patients," McNeil said. "We simply recognize that we can't be all things to all people." "

Wow, that's pretty brazen. We can't be all things to all people, we can only be all things to people with money.

I couldn't agree more with your assessment of this bill before the New Hampshire Legislature...let's all compete on a level playing field without setting rules for some at the expense of others.

Just a quick note that the bill was amended before it was narrowly approved by the House Health, Human Services and Elderly Affairs Committee to remove the exemption from the requirement to pay the state's Medicaid Enhancement Tax (MET). While that is certainly positive that this special treatment was removed, the reality is that they likely would have had to pay it anyway...it should be noted that in 3 of the 4 other states in which CTCA owns and operates a hospital with a Medicaid provider assessment, they pay it. So if they can do that in Pennsylvania, Illinois and Georgia, why can't they do that in New Hampshire?

This bill has a long way to go before it becomes law. The narrow 10-8 vote in the Committee was achieved only after the Speaker replaced one member of the Committee to ensure passage. Key members of the State Senate have already expressed some reservations and they will continue to hear why this bill is bad for patients, communities and hospitals in New Hampshire. The New Hampshire Hospital Association is working to defeat this bill and we welcome your readers to speak out and to follow this issue at www.nhha.org.

I don’t like unlevel competitive playing fields either. There are two issues I wonder about though. First, how would outcomes compare to those achieved by traditional hospitals? Second, how much less, if anything, would commercial payers be charged by CTCA as compared to full service hospitals? Surgical procedures and cancer treatment are usually the most profitable inpatient services offered by hospitals so the CTCA facility would hurt if it captured meaningful market share among commercially insured patients.

Whether it’s profitable or unprofitable to treat any given cancer patient, though, the system and patients themselves would be better off if oncologists consistently provided an honest and objective assessment of the patient’s prognosis and ensured that patients fully understand what they are signing up for if they opt for the most aggressive treatment approach. While they’re at it, doctors should minimize the number of surgical interventions that are performed on late stage cancer patients if they won’t extend the patient’s life or improve its quality. There is a lot of waste and futile care in this segment of healthcare. Maybe the CTCA controversy could be a catalyst for rethinking the approach to cancer treatment, at least in the affected region.